COLUMBIA, S.C. (WIS) - Amid this pandemic, many people are wondering, “Could the coronavirus impact Social Security in the future?” For another edition of ‘Money Matters’ Josh Bradley of Capital City Financial Partners has the answers to your money questions.
How likely is Social Security to remain in place for retirees?
“In 2021, social security for the first time ever will cost more to payout than the income brought in from those in the workforce. The deficit was projected prior to the Coronavirus pandemic,” Bradley said.
He goes on to explain more about why the social security system is not working. “When social security started, 42 people were paying into the system for every 1 drawing out… and on top of that the average time that 1 person actually drew social security before passing was only 2 years. Now, people live well into their 80′s and beyond, it’s not uncommon for someone to draw social security for 20 years and the system wasn’t set up for that,” he said.
“With the addition of 10′s of millions being laid from the coronavirus, it could reduce funding for social security by up to an additional 3 years!” Bradley said.
What are potential changes that congress could make to extend the life of Social Security?
“Congress passed the $2.2 trillion stimulus bill earlier this year and the Fed has been using all its weapons to keep the economy afloat as the United States has been shut down for multiple months, so due to this funding shortfall with Social Security… taxes are probably going to go up,” he said.
Anchor: What should people be doing right now to prepare for future changes?
“If your financial plan is to retire and live off social security… now is the time to revisit that thinking. I believe a form of social security will still be around in 10-15 years, but it’s going to look different than it does today, reduction day is coming,” he said.